Global Trends in Health Care
Reform: The United States
Thomas Rice
UCLA School
S h l off Public
P bli H
Health
lth
AcademyHealth Annual Research Meeting
June 28, 2010
1
Topics
The need for reform: how the U
U.S.
S
compares to other countries
Main elements of the reform legislation
Does the legislation make the U.S system
look more like those of other countries?
2
The Need for Reform: How the
U.S. Compares to Other Countries
3
SPENDING
4
International Comparison of Spending on Health,
1980 2005
1980–2005
Average spending on health
per capita ($US PPP*)
$7,000
Total expenditures on health
as percent of GDP
16
United States
Germany
Canada
France
Australia
United Kingdom
$6,000
14
12
$5,000
10
$4,000
8
$3,000
6
United States
Germany
Canada
France
Australia
United Kingdom
$2,000
4
$1,000
2
$-
* PPP=Purchasing Power Parity.
Data: OECD Health Data 2007, Version 10/2007.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
04
20
02
20
00
20
98
19
96
94
19
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
04
02
20
20
00
20
98
19
96
19
94
92
19
90
19
88
19
86
19
19
84
19
82
19
19
80
0
5
5
6
ACCESS
7
Percentage of Population Uninsured, 2007
((Source: OECD Health Data,, 2008))
18%
16%
16%
14%
Percent
12%
10%
8%
6%
4%
2%
2%
1%
0%
0%
AUS
CAN
0%
0%
GER
NETH
UK
US
C
Country
t
8
Cost-Related Access Problems
i P
in
Pastt Two
T
Years
Y
Base: Adults with any chronic condition
Percent
AUS
CAN
FR
GER
NETH
NZ
UK
US
Did not fill Rx or
skipped doses
20
18
13
12
3
18
7
43
Did not visit a doctor
when had a medical
problem
21
9
11
15
3
22
4
36
Did not get
recommended test,
test
treatment, or follow-up
25
11
13
13
3
18
6
38
Anyy of the above
access problems
because of cost
36
25
23
26
7
31
13
54
Data collection: Harris Interactive, Inc.
Source: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults.
9
QUALITY
10
Infant Mortality Rate
Infant deaths per 1,000 live births
National Average and State Distribution
U.S. average
12
Top 10% states
11.1
10 3
10.3
8
Bottom 10% states
International Comparison,
Comparison 2004
7.2
10.2
70
7.0
69
6.9
9.9
9.9
68
6.8
70
7.0
9.6
68
6.8
10.1
68
6.8
6.8
5.3
4
5.3
4.4
51
5.1
50
5.0
49
4.9
48
4.8
4.7
4.7
2003
2004
2.8
3.2
3.1
2.8
3.3
0
1998
1999
2000
2001
2002^
p
Ja
an
Ic
n
el a
d
S
d
we
en
N
w
or
ay
l an
F in
d
De
a
nm
rk
C
a
an
da
^ Denotes baseline year.
Data: National and state—National Vital Statistics System, Linked Birth and Infant Death Data (AHRQ 2003, 2004, 2005,
2006, 2007a); international comparison—OECD Health Data 2007, Version 10/2007.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
U.
S.
11
Potential Years of Life Lost Due to Diabetes
per 100,000
100 000 P
Population,
l ti
2006
100
99
80
65
56
60
39
40
37
36
35
29
25
24
UK*
SWITZ*
20
0
US*
NZ**
CAN**
NETH
OECD
SWED**
GER
FRA*
Median
*2005
**2004
Data: OECD Health Data 2008 (June 2008).
12
Medical, Medication, or Lab Test Errors
i P
in
Pastt Two
T
Years
Y
Base: Adults with any chronic condition
Percent
AUS
CAN
FR
GER
NETH
NZ
UK
US
Wrong medication
or dose
d
13
10
8
7
6
13
9
14
Medical mistake in
treatment
17
16
8
12
9
15
8
16
7
5
3
5
1
3
3
7
Delays in abnormal
test results*
13
12
5
5
5
10
8
16
Any medical,
medication, or lab errors
29
29
18
19
17
25
20
34
Incorrect diagnostic/lab
test
es results*
esu s
Data collection: Harris Interactive, Inc.
Source: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults.
13
Exhibit ES-1. Overall Ranking
Countryy Rankings
g
1.00–2.33
2.34–4.66
4 67–7
4.67
7.00
00
AUS
CAN
GER
NETH
NZ
UK
US
OVERALL RANKING (2010)
3
6
4
1
5
2
7
Quality Care
4
7
5
2
1
3
6
Effective Care
2
7
6
3
5
1
4
Safe Care
6
5
3
1
4
2
7
Coordinated Care
4
5
7
2
1
3
6
Patient-Centered Care
2
5
3
6
1
7
4
6.5
5
3
1
4
2
6.5
Cost-Related Problem
6
3.5
3.5
2
5
1
7
Timeliness of Care
6
7
2
1
3
4
5
Efficiency
2
6
5
3
4
1
7
Equity
4
5
3
1
6
2
7
Long, Healthy, Productive Lives
1
2
3
4
5
6
7
$3,357
$3,895
$3,588
$3,837*
$2,454
$2,992
$7,290
Access
Health Expenditures/Capita, 2007
Note: * Estimate. Expenditures
p
shown in $
$US PPP (p
(purchasing
gp
power p
parity).
y)
Source: Calculated by The Commonwealth Fund based on 2007 International Health Policy Survey; 2008 International
Health Policy Survey of Sicker Adults; 2009 International Health Policy Survey of Primary Care Physicians;
Commonwealth Fund Commission on a High Performance Health System National Scorecard; and Organization for
Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).
Main Elements of the
R f
Reform
Legislation
L i l ti
15
Insurance Coverage
From 48 million to 21 million uninsured:
–
–
–
–
Income
Income--based subsidies to uninsured
Employer mandate
Individual mandate
Medicaid (low
(low--income coverage) expansion
Mechanisms:
– Private: Each state create insurance exchange for
individuals w/o coverage and small employers
– Public: the Medicaid expansion
16
Coverage (continued)
Subsidies:
sliding
S b idi
lidi scale
l up tto 400% poverty
t
level
Medicaid: everyone covered whose income is
less than 133% of poverty level
Individual mandate: Everyone must buy
coverage or pay a penalty ($700/individual,
$2100/family), unless this exceeds 8% of
income
income.
Employer mandate: Employers with more than
50 employees must provide coverage or pay
penalty of $2000/employee.
17
Health Insurers
Insurers…
Cannot turn applicants down who have history of
illness
Cannot terminate coverage
Must renew coverage
Cannot charge more to those who history of
illness (older people can be charged maximum
of 3 times that of younger person)
Return at least 80% of premiums in the form of
health service benefits
18
Quality Enhancement
Establish
E t bli h office
ffi tto supportt “comparative
“
ti
effectiveness research”
Pilot program to develop “bundled
payment”
p
y
systems
y
for hospital,
p ,p
physician,
y
,
and post
post--acute services to “accountable
organizations”
care organizations
Pay hospitals based on performance on
quality measures
measures, with nursing homes and
home health care to follow
19
Financing
Increase
Medicare
Partt A payrollll ttax ffrom 1.45
I
M di
P
1 45 tto
2.35%, and 3.8% extra tax on investment income,
for those with incomes over $200
$200,000
000 individual or
$250,000 family
“Cadillac
Cadillac tax”
tax on employer health plans with values
above $10,000 individual/$27,500 families,
beginning 2018. Tax = 40% of amount above
th h ld
thresholds
Reduce payments to Medicare managed care plans
Eff
Effect
other
h reductions
d i
iin M
Medicare
di
spending;
di
establish Board to submit proposals to contain costs
if Medicare spending rises too quickly
10% tax on indoor tanning services
20
Does the legislation
g
make the
U.S system look more like those
off other countries?
?
21
How Close is U
U.S.
S Moving?
Q lit
Quality:
– Some small but significant steps towards using
comparative--effectiveness research to determine
comparative
coverage of technologies/drugs
– Pilot studies/grants
g
to encourage
g moving
g away
y from
fee--for
fee
for--service, through bundled payments to new
new-fangled provider groups (accountable care
organizations)
– More tangible steps to link (first) hospital payment
(and eventually) physician and outpatient care, to use
of effective processes and success in achieving
desired outcomes
22
S Moving? (cont
How Close is U
U.S.
(cont.))
Access:
Access:
– Number uninsured to be reduced by about 60%
– All poor and
d nearnear-poor will
ill h
have M
Medicaid,
di id b
butt
sometimes this is viewed as second tier coverage
Costs:
– Very little (but that was politically necessary)
for-profit insurance
– Greater (!) reliance on private
private, forthan before
– No movement towards monopsonistic
p
p
purchasing
g
power with rejection of public option
– Almost no “supply“supply-side” cost containment
23